Finance Area
Fogelman College of Business and Economics
University of Memphis
Memphis TN 38152
August 18, 1998
Mr. Jonathan G. Katz
Secretary, Securities and Exchange Commission
Mail Stop 6-9
450 Fifth Street, N.W.
Washington, D.C. 20549
VIA Internet
Re: File No. 4-208
Dear Mr. Katz:
The intention of the 1975 Securities Act Amendment was to enhance the
competition for order flow for listed securities. The ITS system that
was developed to respond to the requirements this act provides only very
limited competition for order flow. Technologically speaking, it is an
obsolete system.
In contrast, the Optimark system that is proposed for the Pacific
Exchange promises to greatly enhance the competition for order flow, to
the benefit of all investors and our entire economy. It would be quite
ironic if an obscure requirement of the ITS system were to cripple the
functioning of Optimark. For example, the argument that Optimark orders
be manually entered into the ITS system rather than entered by computer
is absurd. Computers constantly communicate with other computers
today-manual intervention in this process in the case of Optimark
introduces the opportunity for human error, seriously delays execution
which thereby reduces the value of the system to traders, and
potentially disadvantages traders who have entered orders into the
Optimark system.
I urge that the SEC not impose, nor permit to be imposed, any such
unreasonable restriction on the functioning of the Optimark system.
Sincerely,
Robert A. Wood
Distinguished Professor of Finance